CONFIDENTIAL
Keference
20.
There are also strong commercial and financial links between China and Hong Kong. These include the provision of services to Hong Kong its water supply, Chinese banks which channel remittances and earnings from Chinese-owned companies operating from Hong Kong. Chinese investment in the colony was estimated
at over US $2.5 billion in 1978 and is increasing rapidly as China invests in the new residential complexes and in the development of the transport network in Hong Kong.
Invisible earnings from Hong Kong are estimated as follows:-
Table 9: Invisible Earnings from Hong Kong 1976-80 (US # million)
Hong Kong
Remittances
Other Earnings
Total
1976 1977
1978
1979
400
500
600
n/a
500
600
600
n/a
900
1000
1200
1400
21.
The most recent projections of China's foreign exchange earnings from Hong Kong, made at the beginning of 1980, suggested that China would continue to earn a substantial proportion of these earnings from Hong Kong. The value of trade and invisible earnings would increase in absolute terms, reflecting Hong Kong's dependence on China for certain imports and the strengthening of commercial links.
ODE 18-77
CONFIDENTIAL
SS 8/78
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